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Sidebar: Mexican Macroeconomics

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In 2007, the U.S. Senate debated the doomed McCain-Kennedy "comprehensive immigration reform" bill that aimed to secure borders, enforce workplaces, modernize the visa system, and allow non-criminal undocumented immigrants already in the country to pay a fine and stand in line for legal residency. (Under the proposed law, an immigrant would be denied public benefits until five years after his green card was issued.)

At the time of the debate, the Heritage Foundation issued a policy paper with an alarming headline: "Amnesty Will Cost U.S. Taxpayers at Least $2.6 Trillion."

The Heritage Foundation, a think tank that shares funders and a hard-line immigration stance with FAIR and its sister organizations, reported that migrants already living illegally in the United States, if given amnesty, would cost the country trillions in Medicare, Medicaid, and Social Security costs as they aged.


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John Tanton's groups, which include FAIR, also reported that undocumented immigrants take jobs from low-skilled American workers. Taken together, the reports sent a clear message: Illegal aliens drive down wages and burden taxpayers.

If illegal immigrants returned to Mexico, the argument goes, American workers would step right into their jobs, pay taxes, and shore up the economy.

It is an argument that resonates with American voters.

Even though it's not necessarily true.

In 2007, Edward Lazear, chairman of the George W. Bush White House Council of Economic Advisors, conducted an extensive review of reports on the effects of all immigration, legal and illegal, on the economy. Lazear concluded: "Our review of economic research finds immigrants not only help fuel the nation's economic growth, but also have an overall positive effect on the income of native-born workers."

It's harder to tell just how illegal immigration affects the economy, though.

At the very worst, the effect of undocumented immigrants on the American economy is negligible, economist Gordon Hanson, of the University of California-San Diego, reported in 2009. Using data from the National Bureau of Economic Research, Hanson, commissioned by the pro-immigrant Migration Policy Institute, wrote: "If we account for the small fiscal burden that unauthorized immigrants impose, the overall economic benefit is close enough to zero to be essentially a wash."

A wash.

Not $113 billion a year, as the FAIR report contends. And certainly not trillions of dollars, as the Heritage report contends.

Hanson concluded that those hurt by illegal immigration are low-skilled workers who compete directly with the undocumented workers. He reported that individual economic losses were offset by advantages to businesses that employ the low-wage immigrants.

But here's the clincher: Many of the workers displaced by undocumented immigrants are also immigrants.

The difference is that the displaced workers arrived earlier. In February, the progressive Economic Policy Institute, in a report called "Immigration and Wages," wrote that newly arrived low-skilled immigrants with less than high school degrees displaced other immigrants of the same skill level — and fewer American-born workers.

Immigrants take a bigger financial hit than native-born workers when the economy tanks, and they are among the first to get jobs when the economy recovers, an October report by the Pew Hispanic Center says.

In many cases, Americans either don't want low-skilled jobs, can't physically perform them, or don't know they're available.

About half of farm workers are unauthorized immigrants, the U.S. Department of Labor estimated more than a decade ago.

This probably hasn't changed much. In September, the Associated Press reported that native-born workers weren't seeking advertised farm labor jobs: "Since January, California farmers have posted ads for 1,160 farm-worker positions open to U.S. citizens and legal residents. Only 233 people applied after being linked with the jobs through unemployment offices in California, Texas, Nevada, and Arizona."

Many economists say that by filling low-skilled jobs, immigrants improve business profits, which in turn create more jobs for higher-skilled American workers. University of California economist Giovanni Peri, for example, wrote in a recent Federal Reserve Bank of San Francisco Economic Letter that immigrants expand the economy, which in turn expands job opportunities for non-immigrants.

And he's not alone.

The Brookings Institution reports that "economists have found that immigrants raise average wages for the United States as a whole."

Also, many economists say economic growth in the United States is impossible without population expansion, and since the native-born American population is older and declining in numbers, immigrants expand the population, which in turn stimulates economic growth.

This puts the United States at a "competitive advantage" compared with other developed countries that don't have enough workers to expand the economy, says Marc Rosenblum, of the Migration Policy Institute.

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